How did we end up in this business and why did we choose a few niche marketplaces – laboratories, imaging centers / medical businesses and IT? We are often asked this question from our clients, customers, and prospects.

I wish we could say that it was part of our well thought out strategy, but in reality it was was a combination of serendipity and in terms of start-up lingo, ‘pivoting’ or course-correcting, to take advantage of new opportunities.

Years ago, I read the book called The Alchemist – an international best-seller by Paulo Coelho of Brazil. Although, the book is a fiction, I thought it provided some of the most interesting business lessons. Its central themes has always resonated with me. One of the message is that when you want something bad enough, the universe conspires in helping you achieve it. And it also goes on to illustrate how the hero in the book, Santiago, gets a number of signals or dreams guiding him.

I personally have experienced many situations where some voice has guided me or helped me – whether it is an intuition, a dream, an inner voice or just a seemingly unlikely coincidence which solved some intractable problems. And I have spoken to many people who seem to have had similar experiences.

In Alchemist, our hero also has these dreams or signals, which provided a guidance or help, seemingly out of no-where. And the message is to accept such help that will allow you to reach your goal.

You should be open enough to receive these signals and courageous enough to act on these signals, even if it may need you to change your course.

In my case, as a research scientist for a start-up, we were trying to solve a particularly tricky problem of getting pure plasma out of a drop of blood using a membrane ( a super-fine filter). At the time, in the early 1990s, this was a big deal. and no-one except one large company was able to do this. They used glass fibers and the process was patented. It worked but not particularly well. If we succeeded, this could allow a large number of other blood tests to use a simple way to extract plasma for a quick 1 or 2 minute tests.

As a lead scientist, I had probably tried every type of membrane that I could lay my hands on and nothing worked. However, the way things were going, I was confident that somehow we will solve it as there was a feeling within me that this was destined to succeed. One day, I was sitting in my lab, kind of stuck, thinking of what else I could do. And then the “signal” came. Someone came to the lab and delivered me a small fed-ex package containing some other type of membranes from that I had ordered a while ago. I had forgotten all about it since I had ordered so many. It was nitrocellulose membrane from a company called Gelman. Thinking that I had nothing to lose by trying out this membrane, I quickly put it over my test strip and put a drop of blood and I could not believe it – within a second, I got pure plasma coming out on the other side. I was amazed as I had tried similar nitrocellulose membranes from other companies and they did not work! So we thought we had the problem solved!

But what happened next was even more amazing. We soon were running out of this membrane and we ordered some more from the same company. But when we got it, we found that this time, these new membranes, which were from a different manufacturing lot, did not work. So we ordered several different lots. It turned out that only the first lot from this company worked!

In other words, I was just lucky enough to get the right lot from this company at the right time. If I would have gotten a sample from one of the the “bad” lots, I might have easily given up! We eventually figured out how to convert the “bad” lots of this company’s membranes into good lots. We went to file patents and license this technology.

But it just proves to me that often there is a “divine” intervention. I wanted this to work badly, and the universe intervened to make it happen for me.

And over the years, there have been a number of situations where when I or when our company was stuck, there was always some event, or signal or guidance, that helped us at the crucial moments. Or when there was a fork in the road, somehow we had a guidance of which road to take.

I have spoken to a number of people who have had similar experiences. In fact there are dozens of inventions and ideas (including nobel prize winning ideas), that originally came to the inventors or creators in dreams. Example include, the sewing machine, discovery of benzene, and many more. And I think that is one reason The Alchemist has resonated with so many people and sold over 65 million copies in 56 languages.

Even Steve Jobs, in his famous Stanford University commencement address of 2005 talked about connecting the dots : “So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.”

For me the book represents – If you want something badly enough, work very hard to achieve your goal, have faith that you will succeed, and when help appears out of nowhere, whether it is in a concrete form or through intuition, dream or a signal, be ready to accept and act on it.

New year is a good time to take stock of your business. Like your car, business needs periodic tune-ups to make it run smoothly.

Car needs oil change to reduce friction and wear and tear on the engine, new spark plugs for for it to accelerate smoothly, and replacing worn out parts so that it will not break down on you and leave you stranded. Your business deserves the same care.

Here are some quick thoughts on tuning up your business this year:

Streamline Your Processes and Systems (Oil Change)

Every business has systems and processes – in how you handle new and existing customers, how you handle your products and services, manage your people, etc. In a young, growing, organization, these constantly change. Dig deeper into your systems, talk to your people who use these systems and see if you can change some of the steps or processes to make these more efficient. Identify a few flaws in your system and fix some of the easier ones right away. This will help your company run smoothly.

For example, in our company, to keep track of our inquiries and status of each inquiry, we have switched to a master spreadsheet which tracks new inquiries and their progress. This master spreadsheet as a google doc, accessible to all of the relevant staff members – so everyone sees the same copy, and can make edits. This now allows us to see the progress on each project and makes us more efficient.

Accelerate Your Growth (Change Your Spark Plugs)

When you look at increasing value of your business, nothing beats the bottom line – revenues and profits. Always think of how you can push the business. This could be offering more products or services, improving or upgrading your products or services, gaining more customers by better sales and marketing or a combination of all of these. Or it could be acquiring another company to gain new products or market share.

For example, in our company we are implementing a few changes this year. A simple thing is just making the whole process more efficient – from the time we get the listing to the time we put it to market and the way we approach prospects and follow up with them. And trying to Another thing we have already started doing is offering our customers additional products and services by expanding our marketplace. We have already invested in software that will allow us to offer directory and classified services as well as way to sell their own products or services. Over a period of time, we see this as an important extension of our marketplace.

Make Your Business Sturdier (Replace Worn out Parts)

Just like you don’t want to be stranded somewhere because the car won’t start due to an old battery or broken fan-belt, you certainly do not want to be to have your business suffer due to breakdown in your critical systems or equipment. Time to examine your critical systems and see if you need to invest in new equipment, software or hardware and how to ensure that your business will not suffer down-time.

One of the important steps that we have undertaken is to put all of our important documents and data in the cloud. We use ShareFile , Dropox, Mailchimp and Evernote software so that our whole team has access to the important files from anywhere in the world. We also use cloud-based email systems (Google appliance) and use software as a service whenever possible (for example for accounting and tax, ) so that we always have access to these services. We are also going to invest in a smart scanner such as Fujitsu that can digitize and file all your documents and has an ability to take different sizes of papers and scan them very fast.

You can think of what your business needs and upgrade or replace the critical systems that you cannot afford to be without.

Are you feeling stuck in your business or career? If you feel that your life is a never-ending ride in a Ferris Wheel, looking at the same scenery, then vacation maybe your perfect prescription. Even if you are happy and moving ahead in your work, a good vacation may help you reach the next level.

Think you are too busy to take time off? Think again. If our President of the USA can find some time to take off for couple of vacations in a year, surely you can too. It is just how you look at it. Think of vacation as not running away from work. But think of it as time for a tune-up and for recharging your batteries. You will come back with a fresh dose of enthusiasm, and ideas that will energize you.

And vacation does not have to be expensive. If you cannot afford an expensive trip, you can go to a soothing place nearby or even have a ‘staycation’. You may stay at home but do something different. If you can afford it, however, then perhaps go to a different country, experience a different culture. You will learn something new from that culture and gain a broader perspective. About a week or so maybe enough for you to get re-energized.
I truly feel that in order to develop the big ideas, you have to step out from your conventional settings and get away from the daily routine. This is why many companies have their meeting in retreats.

We have a tradition now of taking a family vacation in December during Christmas Break. It allows us to connect together as a family and talk to our twin sons (who are now in college) without distractions from their friends and our work and do things together as a family. It allows me to reflect on the year, see what excites me and my colleagues, and what new initiatives and projects we should be doing in the coming year, and what we can learn from our past mistakes.

More Importantly, it allows me time to read a lot of different books and learn from other people’s experiences.

This Christmas vacation, we spent a few days in Jamaica. Spending the time by the Ocean and enjoying company of my family and the hospitality of the resort and the Jamaican people was invigorating.

But I also spent quite a bit of time reading a number of books which were both inspirational and provided practical tips on how I can improve myself and my business.

I am happy with the progress we have achieved last year in our business, excited about new possibilities in the coming year and can hardly wait for implementing our new ideas this coming year. I wish all of you the very best for 2015 and urge all of you to make vacations and time off as important tools in your arsenal on how to take your business or career to the next level.

When you are looking to get into the laboratory business – should you go out and try and buy a lab or should you build it from scratch? Well it depends.

It depends a lot on the type of lab (whether it is in highly regulated industry, such as a clinical lab and where someone else, such as insurance companies decide on what you can charge), whether you can find the type of lab that you are looking for in your preferred geographic area, and last but not the least, your own personality, skill sets and knowledge.

Case for Buying a Lab

More buyers seem to prefer going this route as it seems like a safer route to take. Particularly, if you are not experienced in this industry. For a healthy laboratory, you avoid the steep learning curve, you get a business that is generating a positive cash flow from day one. You inherit a working system and a trained staff. You also are more likely to get a loan from the bank to fund your dreams. You can bring your own skills and capabilities to grow the company. As they say, it is much easier to make the second million than the first million.

And in some industries, it may be perhaps the only preferred choice. For clinical labs in certain states such as NY, it takes 12-18 months or longer to get CLIA-accreditation. and in certain states, small independent labs have a hard time getting accepted by the insurance companies. It would make sense than to buy an existing lab with CLIA-accreditation and existing insurance contracts if such a lab was available.

But expect to pay a price for this – the labs are typically (but not always), valued by a multiple of EBITDA. EBITDA is a metric defined as Earnings before Interest, Taxes, Depreciation and Amortization. We’ll discuss lab valuation in an upcoming post, but expect to pay about 3-5x of EBITDA for a healthy lab. So if an EBITDA for a lab is say $300K, expect to pay on an average about $1.2 million. Can you afford it? Is it worth the price? Are you better off building on your own? Exception to this maybe if you find a good lab which is doing poorly but you see great potential in it and are confident that you can turn it around. Such “turn-around” labs can sometimes be had at a bargain.

Case for Building Your Lab

If you (or someone in your team) is great at sales and marketing, have rich contacts in your industry, and are confident that you can bring the business to your new lab, or you are buying a lab for internal research, perhaps you should build your own lab (as long as regulatory hurdles are not too high). The advantages include cost savings (you could save as much as 50-75% over buying a healthy lab), you can have it at a location you prefer, equip it as you want it, and build your own culture in your business. And if you are unsure about how to go about setting one up, there are companies and consultants who can help you set it up.

Summary

Buy a lab if:

a. You are looking for a “turn-key” lab with ready cash-flow and which may perhaps need only a few tweaks

b. Regulatory and insurance constraints makes this a much more practical solution

c. You are flexible as to the exact location

d. You are looking to grow your market share via acquisitions

Build a lab if:

a. You can bring in business or have captive internal business

b. Want to work on a shoestring budget without taking in a lot of debt

c. Want to have it on your terms – building your own culture, your preferred location, and choosing your own equipment

GLASS HALF FULL

Hello Friends:

This is one of my favorite times of the year. Ah! The holiday season. Time to take it a bit easy, spend time with your family and friends, reflect on the past year, make some resolutions to improve myself in the coming year (and beyond), and help those who are less fortunate.

Sometimes, as I listen to the news now-a-days, it seems that usually the focus is on all the negatives – bad economy, grid-locked congress, rising national debt, vitriol-filled political attack ads, violent and hate crimes, Euro-crisis, Arab Spring like protests everywhere we look.

So let us step back and be thankful and grateful for the good things that we do have:

Iraq War is Over:Yesterday I was watching a special on ABC’s 20/20 about Troops returning home. We have ended a major war in Iraq and all of our troops are home. Although we have been fighting two major wars abroad – in Iraq and in Afghanistan for past several years, most of us are too far removed from it to feel any pain. After all there is no war tax, no shortage of goods here, no real sacrifices that most of us have to endure. By contrast, these troops and their families, friends, and relatives have made a huge sacrifice in defending our country and fighting against evil. They had put their lives on the line for us, they put their lives on hold, left their families including young children for months or years on end to fight a war on foreign soil under difficult conditions.

We are thankful that they are home now with their families and for their enormous sacrifice. And when we come across them during our daily chores, let us talk to them, express our gratitude and try to learn more about what they did, where they had been. Many war veterans feel kind of disconnected when they come home – that we are disconnected from the war, and not interested to learn more about Iraq or Afghanistan or what they did. Let us make them feel welcome and make them feel at home. And if any of you are hiring, give them a chance to get back into civilian life.

The Grass Greener on this Side: In all of the talks about debt, and economic slow-down facing us, we often harp on the negatives, but forget all of the good things we have. I often remind people when they are complaining in general about how tough their lives are (and my family hates me when I do it to them), that there will be millions of people who will happily trade their lives for you. After all we can move about in the streets and express ourselves without fear of being shot, arrested or tortured. Our economy is still more robust than many other countries, our schools are still better than those in most other countries, and I feel that USA is still the most open country where anyone, irrespective of their ethnicity, economic or social status can still make it with hard work and determination. And USA still has the best college education system I feel of anywhere.

We can Still Dream of Better Tomorrow: I think no situation is worse than someone in a situation where the future is bleak and there is no hope of better days. And there are lot of countries and places where people are in dire situation and they have nothing to look forward to. Fortunately for us in the USA, it is still possible to have our dreams, and we can always hold on to our beliefs that tomorrow can be better, that the future can be brighter, if only we can work harder and smarter.

So let us be thankful in this holiday season for the blessings and things we have received, be compassionate and helpful to those who are less fortunate and continue to foster and work towards our dreams to make not only our lives, but the lives of those who are not so fortunate better through our words and actions.

Wish all of you a very happy holiday season and the very best for the new year.

As the world mourns the death of Steve Jobs, I listened to his now famous 2005 commencement address again .. and again.

This is perhaps the most inspirational and spell-binding 15-minute speech ever delivered. Three powerful messages .. in three touching stories. The message was so authentic because he was essentially telling the stories from his life.

Connect the Dots …

Steve Jobs talked about how his casually taking interest in calligraphy and taking a class at Reed College, a class which apparently had no practical use, proved to be critical ten years latter when this knowledge became a key in Macintosh having a great typography. Much later, when he was fired from Apple, the very company that he himself had founded, it was devastating at first, but proved to be the best thing that happened to him because it rekindled his passion and creativity and laid the foundation for his brilliant and pioneering innovations.

“Again, you can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life. “

I am sure, as many of us look back in our careers and lives, we can find instances where we can now see why certain things, that at the time looked devastating, or did not make sense, happened for a reason. Now we can see why. We can now connect some of these dots in our own life when we look back.

Don’t Settle …

This is probably the best advice. We hear it often but it takes an awful lot of courage to follow. We, in general, are programmed to follow a safe career path. Many of us encourage our children to become doctors, lawyers, or professionals, so that they can make good money and live comfortably. When someone decides to walk away from a lucrative Wall Street career to follow his (or her) dreams, family and friends often think that person is making a big mistake and try to talk him out of it.

Steve Jobs followed his passions and his heart. He was passionate about his work, he loved what he did, and that is why he could come up with amazing creations.

“Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. Don’t settle.”

Do you love what you are doing? Do you do the type of work so that you can’t wait to get to your office or your lab? If not, do you have the courage to change your course and look for something different? Do you encourage your children to follow their own passions and their hearts? Change is hard – but let us not settle just because it is convenient. Keep looking.

One of the books that made a deep impression on me was “The Alchemist”, an international best-seller by Brazilian author Paulo Coelho. The book resonated with me because it talked about omens and messages that we encounter in our lives, trying to guide us to the right path that will follow our dreams. It kind of comnbines both of the above lessons that Steve Job talked about – “Connecting the Dots” and “Don’t Settle”.

Stay Hungry, Stay Foolish …

The last message of Steve Jobs was just as important. We start our life as kids, full of curiosity and eager to try out new things. But slowly we tend to get comfortable in our lives and our careers and somewhere along the way, we sometimes lose the hunger for knowledge. We are afraid to try out some outlandish, big ideas or follow our big dreams – so that we do not appear foolish to others. However, big achievements are not possible unless you are not curious, not hungry for knowledge, not afraid to try out what may seem initially as some absurd experiments. I can vouch from my personal experience that some of my best accomplishments in my professional life were when I was trying out completely new fields and not afraid to try something totally different and something that would seem silly to someone in the field. It is also a fact that many breakthroughs in science come when researchers from a different field look at the problem with fresh perspective. For example, Francis Crick was a physicist who was able to bring some fresh perspectives to the field of biology to deduce the double helix structure of DNA with James Watson.

Great things will happen if you stay hungry, stay foolish and follow your dreams.

“Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”

Steve Jobs – Thank You For Inspiring Us to Be Better

There is an old stanza by a famous Indian poet and philosphopher of the fifteenth Century, Sant Kabir, that roughly translates into:

“When you are born,World Laughs and You Cry,Do Such Deeds so when you die,You Laugh and the World Cries”

Yes, Steve Jobs, the whold world is crying today. And you must be smiling today at what you have achieved. You lived your life well. So long!

It is a somber day today – 10th anniversary of 9/11 and my eyes are tearing up as I listen to family members reciting the names of loved ones they lost that fateful day and giving brief tributes to them. They lost fathers and sons and grandsons, grand-daughters, daughters and mothers, uncles and aunts, brothers and sisters, friends and colleagues.

I still remember that day vividly. I was on my way to work in Brooklyn and as our subway train A passed by the World Trade Center stop just after 8:45 am on its way to Brooklyn, me and my fellow passengers were blissfully ignorant that at around the same time, a plane had just hit the North Tower. I was still day-dreaming about the Sunday evening two days ago, where our family and our relatives had all gotten together to celebrate my wife’s birthday at one of our favorite vegeterian Chinese restaurants in Brooklyn Heights. Afterwards, we had spent a leisurely Sunday evening, strolling by the promenade on the waterfront there, enjoying the mimes, watching a shooting going on for a film, and mostly soaking in the breath-taking views of the Manhattan skyline against the setting sun, with the two WTC towers defining the NY skyline. Little did we realize that this is the last time that we will be able to see these towers from this spot.

Life seemed perfect then!

As our train came to our Brooklyn MetroTech station, I sanpped out of my day-dream, and hurriedly made my way to our building. I was surprised to see a crowd of people staring at a bank of TV monitors that were in the lobby. They were showing smoke coming out of one of the WTC towers, with the report that a small plane had crashed into it. I made my way to the office on 11th floor where we had a clear view of the WTC towers and NY skyline. We were alternating between watching the TV and looking at the WTC towers when some of my colleagues came running after they saw a second plane plow through the second tower.

Suddenly everything changed.

And as we watched the events unfold throught the day, everybody seemed shell-shocked. The Brooklyn-bridge was chock-full of people walking towards Brooklyn from Manhattan with a dazed look on their faces. Late in the evening, after train services resumed and I could take the train back to NJ, I remember how quiet the train-ride was. We were blankly staring outside – as our train passed by the area from where we should have been seeing the WTC buildings, we only saw lot of smoldering smoke. There was an eerie silence in the train as we were absorbing the enormity of what had happened. We were all crying silently inside, thinking of friends or relatives we might never see.

Luckily, we were spared from loss amongst our immediate family, friends or relatives. But you always knew someone who lost someone dear, and although you did not know them, you felt a heavy heart and got teary eyed as you heard or read about their stories. For the next month or two, during commuting to work, I would read NY Times’s special feature, Portrait of Grief, where they had briefly chronicled short biographies of the victims (see http://www.nytimes.com/interactive/us/sept-11-reckoning/portraits-of-grief.html). This series, beautifully chronicled, gave you much better understanding of the victims and their families. It provided me with a way to grieve, knowing a littlle bit more about the background and lives of some of these people. They had so much life, so much talent, so much to give to the society, so much love for their family and community.

Lessons From Survivors

The stories of survivors was also gripping. Recently NPR radio had a show, talking to some of the survivors about the experience. And it was just as moving and inspiring.
And so today, on the 10th anniversary of 9/11 as we pause for a few minutes to remember those who perished, and salute the sacrifices made and the heroism shown by our first responders and many other heroes of the day, let us make a few pledges:

Let us make sure that we urge Congress to give full health benefits to our first responders, many of whom have contracted cancers which are not covered currently by health insurances. Our first responders do not have to fight to get the health benefits.

Let us salute the sacrifices made by our troops fighting for our freedom in Afghanistan and Iraq, and if we have businesses where we are hiring, let us see if we can help returning troops a chance to make a decent living.

Let us also learn the lesson from survivors. One of the messages resonating through this is that life is precious. It is a gift. You do not know whether you will have tomorrow. So make the most of the present. Sieze the Moment. Live it to the fullest as if there may not be tomorrow. Give it your best – in your work, towards for your family and friends, and to your employees and co-workers

Let us also work together to make America strong again. It is still the country where most people want to come to – a melting pot of cultures and religions, tolerant to contrasting view and ideas. But we cannot rely just on Government to turn around the economy. We all have to do our part. In JFK’s words – “Ask not what the country can do for you but what you can do for the country”. If you are an employer, put emphasis more on hiring people and expanding business rather than firing people and cutting cost.

Let us manufacture / outsource services in the US when we can, buy American when we can, and have an optimistic attitude that tomorrow will be better. Beleive in that, take some chances, and hire for tomorrow’s growth. If everyone starts believing that tomorrow will be better, it will be better.

There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction. – John F. Kennedy

They say that every business should be started with an exit strategy in mind. It applies to any kind of business, not just the laboratory businesses.

There may come a day when you may want to retire, or running the lab become very stressful, or your health isn’t what it used to be. Do you have an exit strategy for such a day?

Exit strategy could be having a succession plan – turning over your lab to a family member whom you have been mentoring, or selling the lab to an outside company, or selling within to your employees.

It is never too early or too late to start thinking about your exit strategy. After-all, you never know when you think you will need it. Kind of like a Will or an Insurance Policy. You never know when you will need it.

Real Life Stories

Recently, in the span of a few months, we were unfortunately involved in emergency sale / liquidation of two labs that had to be sold off at a significant discount.

Sometime ago, I received an email from a lab-owner that we should talk. We set up a time to talk and he described his situation, which was really sad. He told me that his young, two-year old lab was doing well, he had found some unique niches, and the business was growing by 25-30% a year and future looked great. He was thinking of hiring more people. And then he got shocking news from his doctor about a terminal disease. But he said he was still feeling good and he had at least some time – perhaps couple of years- to plan for the future.

We tossed around a few options. Since he was feeling well at the time, and the lab was still growing well, it seemed like it might be a good idea for him to take in a minority partner, train him or her, grow the business and when the time came, the partner would buy him out. This way, the business will grow in size and value, the partner would be ready to run it and he would get much better value for his lab. We decided to talk again in a few weeks. Next month I sent him an email and received a shock when I learnt from his wife that he was no more. I can never forget that email and the shock and disbelief that someone whom you spoke to was suddenly no more.

Well, life throws you such curve balls, and in these kinds of cases, there is not much we can do. I must say, that his wife, somewhat involved in the business, was very brave under the circumstances, and was fortunate that the lab did get bought by one of its customers. I still at times think of my conversation with the lab owner and what could have been.

Another incident happened more recently. A lab-owner became too sick to carry on and his business. His business was once spread across continents, with offices in Europe. But it had to be liquidated to salvage whatever little value one could get out of it. I am sure it must have broken his heart to see something that was so dear to his him, and his pride and joy, had to be almost given away – and even then, it was not that easy.

Time to Act is Now

So what can you do starting Today, so that when the time comes, you can hand over the baton to the next captain?

I think the number one thing that every one of the business owners should be thinking about is to increase the valuation of the business. Something you should be thinking about everyday you are at work. But how can you do that?